As the amount of currency approaches infinity, the value of the currency approaches zero
this post was submitted on 22 Sep 2023
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So, what hadn't clicked until I watch this video, is that federal taxes don't 'pay for things', they are just the mechanism by which federal government ensures the currency has value: They compel us to pay taxes (via courts, police, etc.) and those taxes must be paid in the same currency, and so we have to do work to acquire that currency, and so it has value.
No, this is not how currency gets or keeps its value. The work itself is what creates value, which is paid back in currency. If you pay taxes, you transfer some of that value you created to the state. The money would not become worthless if the state did not collect taxes. Money is a way to transfer value, not to create it and taxes are like any payment just that, a transfer of value.
Value is generated by work, but valorization is based on processes of use or exchange. Generally assets have intrinsic value. Fiat currency has no intrinsic value. Its value derives from the state assuring a demand for goods and labor, which will be purchased in the currency, from assuring the availability of investment assets, which will promise a return above an original value, and from regulating the supply, to assure that the values of ordinary goods will remain generally stable.
Well, and also by removing currency from general use, raising value by decreasing availability.
Money existed before the government started using it.
The idea that taxes remove money form the economy and government spending prints new money is an abstraction created for macroeconomics to simplify its models. But it's a lossy abstraction, so don't go thinking this is exactly what happens on the real world.
Centralized, minted currencies definitely did not exist before states started using them. Minted currencies were invented multiple times independently across multiple cultures, but one of the biggest through lines between them is that they required a centralized state who held large reserves, and that they were, in every known case, used to support standing armies for those states.
Fiat money maintains its value largely because the government will purchase labor, goods, and other assets without any concern for gain versus loss.
The state therefore generates demand even when and where private entities will not or cannot hire workers, make purchases, or invest.
Not really. The US dollar is taking longer hit rock bottom because other countries are forced to payback their debts in dollars. Eventually all FIAT currencies go to zero.
Which is bad if you have a lot of money, but not so bad if you have a lot of debt and can still sell your labor and its produce.
But also bad if you have pay for things like food and shelter. Then you are just bartering which is less efficient than having actual currency. You can't buy or sell someone half a haircut.
If wages rise with inflation, then workers gain relative to those with accumulated fortunes.
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Interesting take on inflation: One of the big issues is who gets the printed money. Not us. It's the rich and banks, who buyout all of our resources to hurt us.
Example: 2008 recession, government made blackrock, who then ate up the housing market so that no one owns their home yet they WILL be happy.
Daily reminder that Second Thought (zero Thought) is a genocide defending tankie who ideologically supports ruzzia. https://youtu.be/4qIDOx-Pnzo?si=Bwf2tvCRKgM68FKL
Wow this is horrible. I only recently started watching his content and liking it. But this is surprising, also why is this on some other channel?
To hide it. He is also on a podcast with Yugopnik and Hakim, both of which are tankies.
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Dude is giving iffy vibes for a while now. Watch a few videos of his and a clear pattern emerges:
- Every negative aspect of the modern world is reframed as an intentional conspiracy of capitalism.
- A fantastical version is sold for the socialism of Nordic countries, and all ground realities and challenges are conveniently ignored.
- Uncomfortable leeway is given to past communism crimes, because the evil capitalist sabotaged them.
- A vision of the world is sold where away from capitalism, somehow all inherent human evils will vanish, and we all will act like Captain Picard for some reason.
It's a perfectly fine channel to counter PragerU garbage, but don't take anything he says without a sack full of salt.
I disagree with your characterizations, especially about Nordic states. There was an entire episode criticizing the shortcomings of the Nordic model.
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Never support Second Thought. If you wanna learn about monetary theory and marxism go watch Unlearning Economics.
Why "never support"?
He's a crypto tankie like he genuinely supports bonkers evil regimes and has anti-democratic beliefs but hides it in his main channel videos.
Dare I ask where he is hiding this, and what bonkers evil regimes you are referring to?
It is being claimed that JT, the creator of ST, supports Putin, due to JT's view that the US and other NATO-aligned states militarily supporting Ukraine broadly serves to exacerbate the same trajectory of geopolitical tension that has helped enable Putin's aggression.
JT has called for NATO weakening ties with Ukraine, and reversing its course of expansion, as part of a process for seeking stronger diplomacy between the West and Russia.
I believe he regards such a strategy as best supporting the long term interests of mitigating the incidence of armed conflict and gaining power for the working class internationally.
He has also criticized Ukrainian elites as prioritizing their own class interests aligned with foreign oligarchs, above the broader interests of the working class in Ukraine and elsewhere.
Much of JT's rhetoric and many of his connections are ML, which has not helped him reach common ground with many outside such circles.
He advertises his other channels within his segments on ST.
If he is trying to keep them hidden, then his strategy is extremely ill conceived.
This other video at 29:43 also blew my mind, I just never thought about tax in that way, and it's embarrassing.
Summary for the video-impaired?
Basic mmt with a socialist touch.
Debt just means that the government decides to make something happen. It is neither inherently good or bad. It depends on the context. The biggest opponents are capitalist who want to stop good things from happening as this will reduce their profit. E. G. : more public housing would destroy the business case of landlords.
Amazing summary, and I'm glad you mentioned landlords. I am having such a struggle lately when people tell me about their 'side hustle' as a landlord, and how they make so much passive income. I just wanna scream "so you feel good about making money doing basically nothing while there are so many people unsheltered, and living paycheck to paycheck?".
It’s hard to have true empathy for something you have no real concept of.
Capitalists absolutely love government debt, because it provides a vehicle for safe investment.
They bellyache about debt to bolster the austerity narrative that they use against public spending supporting working class interests.
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